The Financial Conduct Authority’s (FCA’s) quarterly update on the Mortgage Charter showed that since the policy was introduced in July last year up until October this year, 214,000 mortgage accounts had reduced monthly payments.
This accounted for 2.6% of all regulated mortgage contracts and was done by switching to interest-only payments temporarily or extending the mortgage term.
The regulator’s data showed that only 547 term extensions were reversed, suggesting that people who wanted to reduce their monthly payments were more likely to choose an interest-only period.
As of October 2024, 5,710 mortgages were on a temporary interest-only basis, slightly up from 5,453 in September.
The number of people temporarily switching to interest-only payments peaked in August last year at 19,191 accounts, which has gradually declined. In January this year, 9,988 people had changed to interest-only payments.
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In October, 244 borrowers requested to end the interest-only period earlier than originally agreed. This was up from the 231 who did the same in August and the 201 who made this request in September.
Some 2,858 mortgage accounts newly obtained a term extension in October, the lowest monthly total since the Mortgage Charter was introduced, and 2,058 people chose this option.
The number of people extending their mortgage term each month has sat between 5,000 and 6,000 from August last year to February this year. However, between March and September 2024, this ranged from 3,500 to 4,300.
In October, 132,094 mortgages approaching the end of a fixed rate deal locked into a new one six months before maturity, while 28,520 who had selected a new deal before maturity had then chosen an alternative deal.
A total of 159 properties have been repossessed, which the FCA said were reported to be for customer-driven reasons such as voluntary possessions or vacant and abandoned properties.
